CF20: 2024's 20 Top CPaaS Providers You Should Know
Ooma, Vonage and RingCentral are all here. See who else made it and why. Hint: AI is starting to play a role.
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JÖRGE RÖSE-OBERREICH/SHUTTERSTOCK
Frost & Sullivan’s Michael Brandenburg said Twilio is among CPaaS market leaders. This month, Twilio founder Jeff Lawson stepped down as CEO amid ongoing activist battles.
There’s a lot of “chaos” right now at Twilio as it undergoes a difficult maturing process, Brandenburg said.
S&P Global’s Raul Castanon said the divestment of ValueFirst and its IoT business, followed by Lawson’s recent exit, signal a change in direction for Twilio, with a stronger focus on financial performance, potentially at the cost of product innovation.
Ooma is among CPaaS providers to watch. In October, Ooma acquired 2600Hz, which made our 2023 CF20 for CPaaS. 2600Hz is expected to add approximately $7 million in annual recurring revenue to Ooma.
2600Hz has a global customer base leveraging Kazoo, its open-source communications solution, and a suite of proprietary applications through open APIs to provide UCaaS, CPaaS, CCaaS, and AI tools and applications.
Infobip acquired Peerless Network in 2022, strengthening its U.S. and global offering. Brandenburg said Infobip started as a European CPaaS provider and it’s growing globally.
“They’re certainly one to watch,” he said.
Last month, Infobip launched AI Hub, an AI overhaul of its platform that aims to help businesses create end-to-end conversational experiences across the whole customer journey.
Vonage with Ericsson is among noteworthy CPaaS providers, Brandenburg said. Ericsson acquired Vonage in 2022.
“Vonage is doing a good job with Ericsson when it comes to CPaaS,” he said. “They’ve had pretty steady progress working on integrations with Ericsson.”
Brandenburg said RingCentral is among top CPaaS providers. In November, RingCentral announced the global availability of RingCentral Events, an all-in-one solution for virtual, onsite and hybrid event needs. Formerly Hopin Events, RingCentral Events is designed to be immersive and personalized, enabling businesses to provide engaging experiences.
Brandenburg said Cisco’s CPaaS solution is “extremely” enterprise focused and not just a feature from its contact center offering. Cisco’s Webex Connect is a fully programmable CPaaS solution with the choice of API, SDKs and low-code tools, and includes capabilities for full lifecycle management of interactive customer experiences.
Castanon said EnableX is among vendors focused on CPaaS enablement. And Brandenburg said EnableX is one to watch. EnableX is a Singapore-based, global, full-stack communications platform and solutions provider that allows developers and businesses to deliver a holistic omnichannel experience to their consumers.
Cloud hyperscaler Microsoft is focused on CPaaS enablement, Castanon said. Microsoft’s Azure Communication Services offers multichannel communication APIs for adding voice, video, chat, text messaging/SMS, email and more to all applications.
Castanon said Braidio is among vendors focused on CPaaS enablement.
“Our CPaaS Market Monitor scenario analysis shows that accelerated telco adoption could result in a projected compound annual growth rate (CAGR) for CPaaS enablement vendors of 30% over the next five years,” he said. “We believe this could result in a subsequent uplift for the overall market benefiting the entire CPaaS ecosystem, including CPaaS pure-play vendors, telcos and enterprise organizations.”
Radisys is among noteworthy CPaaS providers, Brandenburg said. It brings some new approaches to CPaaS. Radisys offers an end-to-end solutions portfolio from digital endpoints, to disaggregated and open access and core solutions, to immersive digital applications and engagement platforms. Its network services organization delivers full life cycle services to help service providers build and operate scalable and high-performance networks.
Telecom technology provider Nokia is focused on CPaaS enablement, Castanon said. This month, the Finland-based company announced the launch of Nokia Federal Solutions (NFS), a dedicated entity focused on delivering secure and innovative solutions to the U.S. federal government.
Brandenburg said Sinch is among noteworthy providers, and Castanon said it’s among CPaaS pure-play vendors he’s watching. Last month, Sinch completed its acquisition of Inteliquent. The move positions Sinch as the largest independent provider of voice services to both enterprises and telecom carriers in the United States.
Castanon said Proximus is among CPaaS pure-play vendors he’s watching. FlexIO is Proximus' CPaaS. FlexIO centralizes and improves the communication in businesses and their customers via voice, SMS, e-mail and more.
Castanon said CM.com is among CPaaS pure-play vendors he’s watching. Based in the Netherlands, CM.com offers businesses a suite of tools and services to enhance their communication capabilities. With a focus on innovation and security, CM.com allows organizations to connect, engage and communicate with their customers and partners.
Castanon said BICS is among vendors focused on CPaaS enablement. And Brandenburg said BICS is one to watch. BICS is active in digital communications, cloud communication services, mobility and IoT for telecom players, virtual network operators, service providers, enterprise software providers and global enterprises.
Brandenburg said Telesign is among noteworthy CPaaS providers. Identity verification is its “sweet spot” and it supports full CPaaS capabilities in terms of messaging and voice. Telesign verifies more than 5 billion unique phone numbers a month, representing half of the world’s mobile users, and provides insight into the remaining billions.
Castanon said Sharpen is noteworthy in CPaaS for picking up Plum Voice. Last fall, Teleo Capital announced it will merge Sharpen, a provider of cloud-based contact center software, and Plum Voice, a provider of AI-powered voice-based customer interaction technology.
Brandenburg said Plivo is noteworthy in CPaaS. Plivo's enterprise-grade communications platform includes a premium carrier network with connectivity in more than 190 countries, an API platform for messaging and voice calls, and solutions for sales and support teams.
Castanon said Prudent Technologies is among vendors focused on CPaaS enablement.
“The most successful CPaaS provider is going to be increasingly a mix,” Brandenburg said. “You're serving two very different customer personas in the CPaaS market today. You got that peer developer or enterprise developer that only cares about the APIs, and the care and feeding of developers remains critical. And on the enterprise side, I'm certainly seeing the shift to being price friendly. So I think knowing what you're good at or who you want to serve is where you'll find success."
Brandenburg said 8x8 is noteworthy in CPaaS. Last month, the provider announced 8x8 Sales Assist for retailers. Combining components of 8x8 Contact Center, 8x8 CPaaS, and 8x8 Work, the retail solution provides connected journeys across self-and assisted-service use cases while enabling retailers to improve customer satisfaction.
Brandenburg said 8x8 is noteworthy in CPaaS. Last month, the provider announced 8x8 Sales Assist for retailers. Combining components of 8x8 Contact Center, 8x8 CPaaS, and 8x8 Work, the retail solution provides connected journeys across self-and assisted-service use cases while enabling retailers to improve customer satisfaction.
CPaaS providers likely have a bright future ahead as the global market will provide lucrative opportunities for both established players and new entrants in the years ahead.
CPaaS is a cloud-based delivery model that focuses on improving communication channels. It allows companies to add various communication features to their existing business applications.
Our latest CF20 focuses on CPaaS providers. Analysts shared their views on what it takes to succeed with the technology. It includes an updated list and fresh views on changes in the CPaaS market.
The global CPaaS market should reach nearly $131 billion by 2033, registering a compound annual growth rate (CAGR) of almost 28%, according to Acumen Research and Consulting. That’s up from $11.8 billion in 2022.
CPaaS Providers Caught Up in AI Hype
Michael Brandenburg, senior industry analyst of connected work at Frost & Sullivan, said the CPaaS market is getting caught up in the artificial intelligence (AI) hype cycle. That’s in part due to all of the customer experience and contact center use cases driving it.
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Frost & Sullivan's Michael Brandenburg
“I think you're going to start seeing a lot of AI-focused enhancements and features come from the CPaaS providers,” he said. “Being a platform, it's the obvious place for AI to infuse itself. The focus is probably still going to stay on the classic use cases since the beginning of customer engagement and digital channels, and AI is an addition there.”
Also, there’s going to be an additional focus driven by a few providers on fraud detection, Brandenburg said.
“More scrutiny and verification of who is this person calling or, are we sending to valid customers,” he said.
Unlike other markets, such as UCaaS, there’s still room for new providers to grab market share, Brandenburg said.
“Twilio and several others grabbed a lot of the addressable market because of COVID-19,” he said. “Now, ... maybe Twilio was our first pick, but let’s evaluate the market now that we have some time to breathe, and it could transition [to another provider]. So there’s still room in the market for new entrants.”
M&A Highlights Evolving CPaaS Market
Raul Castanon, unified communications and collaboration (UCC) analyst at S&P Global Market Intelligence, said several M&A transactions in 2023 highlight how the market is evolving. Tata Communications’ acquisition of Kaleyra, Ooma’s acquisition of 2600Hz, and SharpenCX’s acquisition of Plum Voice highlight an increasingly competitive environment, particularly for CPaaS pure-play vendors.
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S&P Global's Raul Castanon
“We believe these transactions anticipate the potential for other CPaaS pure-play vendors to exit in 2024,” he said.
Key trends S&P Global is following include the role of CPaaS enablement vendors — for example, those focused on helping communication service providers deliver API-based communication services, helping telcos reposition within the CPaaS value chain, Castanon said.
“Several factors are coming together that could enable telcos to capture a larger share of the CPaaS market while providing new ways to monetize their 5G infrastructure investments,” he said. “Examples include Infobip’s recent partnership with Brazilian network operators Claro, TIM Brasil and Vivo (Telefonica Brasil) to offer the first camera-compliant number verify, SIM swap and device location APIs. Vonage/Ericsson and Deutsche Telekom also announced a partnership to offer MagentaBusiness API, a platform of communication and network APIs for developers and enterprises.”
True Omnichannel Integrated Experience
Roy Illsley, chief analyst of IT operations at Omdia, which shares a parent company with Channel Futures (Informa), said an ongoing trend in CPaaS is the move to have a true omnichannel integrated experience across voice, text and video, and the use of generative AI to make it accessible.
“The one aspect that has yet to become a major impact on the business is the rise of digital sovereignty,” he said. “How CPaaS meets this potential challenge will be interesting.”
The market has evolved and the rise of generative AI has had a major impact on the concept of customer experience, Illsley said. People now expect seamless movement between different communications channels and don't expect to repeatedly provide any information previously supplied.
“AI will have a massive impact and will change the way services are developed to how the customer uses the communications channels,” he said.
We’ve compiled a list above, in no particular order, of 20 top CPaaS providers. It’s based on analysts’ feedback and recent news reports. The list is by no means complete. It includes a mix of well-known providers as well as lesser-known suppliers making strides in CPaaS.
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